City finishes 2013 with $570,000 surplus

By Frank Lewis

February 11, 2014

By Frank Lewis

flewis@civitasmedia.com

The city of Portsmouth reportedly ended 2013 with a $570,000 surplus in its general fund.

“That is a good number, but when you think of where we came from, it’s a great number, going from a negative $901,000 to start the year,” City Auditor Trent Williams said. “Two years ago our goal was to be from $1.4 million to $700,000, and we didn’t meet it. We ended up $200,000 short and ended (20)12 at $901,000 in the red and our goal again for 2013 was to end with zero, which would have meant taking on $200,000 more. But then to actually meet the goal and finish $570,000 to the good.”

Williams attributed most of the recovery to city taxpayers voting an increase in the income tax.

“That also equates to about the amount that we received in the inheritance tax,” Williams said. “So, had it not been for that we would have just been at our goal and not exceeded it as we did.”

Williams said the good part of the final figures is that the city doesn’t have a deficit to deal with. But the bad part is that there is no more inheritance tax money that will be coming in, since that tax was done away with.

“The water fund actually came out of its problem at the end of last year, and ended up with a couple of hundred surplus this year,” Williams said. “As the City Manager stated earlier, we were about $134,000 still in the hole in sewer, but that is actually an improvement over the beginning balance of somewhere around $200,000.”

“I have a clarification,” Portsmouth City Manager Derek Allen said. “The sewer fund will be fixed this year because I don’t believe the state will loan us money if we show that the fund is not solvent. So for us to get a loan for that $5 million (Administrative Consent Order) project it’s imperative that we show that the fund is solvent. So I do intend to fix whatever ills are in the wastewater fund. It will be fixed this year because we have to be able to borrow the money for the $5 million project. So it will be corrected this year. It has to be.”

Williams said the sanitation fund continued about $39,000 in the red this past year.

“It’s not a great number to overcome. It’s not $100,000, but it will have to be dealt with,” Williams said.

Williams said he considers the city’s insurance fund a plus.

“We had in our budget last year the scheduling of 20 percent rates (increase),” Williams said. “And I think the increase is only 13 (percent), so the additional 7 percent has been allocated to reduce the deficit. So it came from about $880,000 in the hole to only $580,000. We if you took that, and offset it with the general fund balance, it would be about even.”

Williams said the city made gains in its two-year plan it had proposed to the state as a way of getting out of its fiscal watch status.

“We’ll continue to make those, and I think we will even further this year in further reducing the insurance deficit and building the general fund balance,” Williams said. “I do agree with the City Manager, regardless of whether our budget date is met by February 28 or March 1 or 2, it is much more important to get it right than to get it done. I believe in getting it right the first time even if it takes a little longer.”

Frank Lewis can be reached at 740-353-3101, Ext. 252, or on Twitter @FrankLewispdt.